News

A Court of Appeal decision has narrowed the scope for agency workers to bring discrimination claims against the 'end user'. This leaves the majority of agency workers unable to pursue discrimination claims against the business or organisation who is the 'end user' in typical agency relationships.

Implications

This decision provides employers with some legal certainty over their relationships with agency workers. The Court ruled that in most agency worker relationships, the agency workers will neither be an 'employee' of the end user, nor working under a contract to provide services personally to the end user (the test under discrimination law).

This decision makes it difficult for agency workers to successfully argue that they were employed or providing a service personally to the end user and so were covered by unfair dismissal and anti-discrimination legislation. However there may be cases where the agency worker can establish that they were employed by the agency and are therefore protected from discrimination by the end-user as 'contract workers'.

There are currently no plans to amend the legal definitions upon which this case was decided in the forthcoming Equality Bill and the Agency Workers Regulations do not affect the employment status of agency workers.

Details

In the case of Muschett v H M Prison Service , Mr Muschett was an agency worker with Brook Street (UK) Limited (Brook) and was assigned to work in the laundry at Feltham Young Offenders Unit (the Prison). When Mr Muschett's assignment at the Prison was terminated by the Prison, he brought claims of unfair dismissal and sex, race and religious discrimination against them and the agency Brook. His claim that he was an employee of the Prison was rejected by the Employment Tribunal who found that he had no written contract with the Prison, was paid by the agency and that the Prison, the agency and Mr Muschett himself could terminate his assignment at any time without notice. They therefore held that he was not an employee of the Prison and accordingly he was not entitled to bring a claim of unfair dismissal against the Prison. The Tribunal also found that Mr Muschett was not an employee of Brook and therefore could not bring a discrimination claim as a 'contract worker' against the Prison. Furthermore, the Employment Tribunal found that Mr Muschett was not 'in employment' for the purposes of anti-discrimination legislation, as this requires the agency worker to have a contract with the end user ( the Prison) to provide services to them personally.

Mr Muschett appealed to the Employment Appeal Tribunal (EAT). The EAT dismissed his appeal, but did give him permission to appeal to the Court of Appeal in respect of his claims that he was an employee of, or 'in employment' with, the Prison as his case raised important issues concerning the protection of agency workers from discrimination by the end user.

The Court of Appeal dismissed Mr Muschett's appeal and upheld the Employment Tribunal's decision that Mr Muschett's status was that of an agency worker and not an employee.

In respect of whether Mr Muschett was employed under a contract to provide services personally to the Prison, the Employment Tribunal's finding that Mr Muschett was under no obligation to work for the Prison and could terminate his assignment with them at any time without notice, meant he was not 'in employment' for the purposes of discrimination law.

The Court of Appeal confirmed that in such cases the agency worker will only obtain protection from discrimination by the end user, if they can show it was 'necessary' for the Court to imply a contract for services with the end user. Where, as in Mr Muschett's case, the terms of his contract with the agency are clear, the Courts are unlikely to do so.